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What are the features of underdeveloped economy?

Is Predominance of agriculture, a feature of under developed economy? I am confused. Please clarify


  • If by predominance you mean a large no. of people dependent on agriculture, yes it can be considered underdeveloped. Regions, where people are indulged in primary activities are called rural areas. Note that primary activities also include mining. If by predominance you mean it's share in GDP, then it may or may not be the indication of underdeveloped economy. Other features of an underdeveloped economy include unequal distribution of wealth, a large no. of people employed in the unorganized sector, underdeveloped money market system, lack of infrastructure, a large no. of people employed in a sector or segment which produces very little output and so on.
  • An underdeveloped economy has less differentiation of employment . Most people will be engaged in the primary sector of the economy. The primary sector of the economy is that which directly dependent on natural resources - like agriculture, fisheries , forestry etc.

    By and by when the economy grows - it gets an industrial set up. Factories open up. Manufacturing takes place.

    At a even higher level of economic growth, services industry sets up.

    You may want to read how India moved to service industry even before it set up a good industrial base - something which is often seen as an anomaly.

    You can read more about it here


    For a layman's perpective, try to see this from the job scenario point of view.

    Let us say, you are in a village. There is a very talented man 'A' who is good at say running and maybe training people how to run.

    Unfortunately, the underdeveloped village may not have a job matching the skills of the person 'A'. All the jobs that the village may have to offer is being an agriculturist or allied activity.

    He moves to town, which is more developed economically and he may have an employment opportunities. If he moves to USA, he may actually be able to get a good job, because the economy is developed enough to provide jobs in new segments.

    People may have different talents. In an advanced economy, there will be a variety of jobs . People could be ballet dancers, architects, yoga instructors, software engineers , masterchefs - absorbing a variety of people.

    This example was just a random one, but I find it very useful when I compare the job scenario is an undeveloped society / economy vs a developed and advanced economy.
    *No good deed goes unpunished* | I am no knight, do not call me Sir | I write articles for Civil Services Aspirants, you can find them at http://blog.forumias.com/author/neyawn |
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